Tuesday, March 31, 2015

Southwest Airline disruption sustains and inspires

Erin O’Neill                                                                                                                              S.D. Blog week 1

Have you ever traveled on a major airline whose pilot tells jokes, wishes passengers happy birthday and sings country music over the intercom?

If this is a strategy with Southwest airlines it gets personal.
Southwest (SW) exercised my curiosity about their success early in life.  Southwest’s outlook and business practice impacted the way I look at any business from my first flight with them. They are and were a low cost airline. A short route between midsize cities was not new; a short routes’ only was new. Dynamic and positive customer service by invested; interesting employees gave fresh attention to a new model.  
            We all sang a sing along with the pilot! The stewardess threw bags of peanuts from 7 rows away!  Southwest had clearly and quickly differentiated themselves in several customer perspective ways.  Including cattle call seating style with first come first serve. No meals, low frills and serious doses of fun.

The essence of strategy is
choosing to perform
activities differently than
rivals do”
                                                                                                Michael E. Porter

            While in Houston I experienced my SW plane arriving at the gate, incoming passengers disembarked, we loaded in and flew off.  That all happened in the time it took for another near by carrier to simply board the same size plane.  This made me want to know more.  I was a twenty-two year old student living in Texas and had flown various airlines at least seventy five times. 
Southwest continued the dynamism behind the scenes: always using and buying the same style Boeing 737 plane. This increased efficiency with crew, planning in airports and all logistic time was hugely reduced. 

A strategy to simplify and standardize reduced the behind the scenes operations across the company. Training was standardized and turnover was low.

Link: The Economist on same plane approach.

This unique approach has sustained them and brought low cost happy passenger loyalty for more than 40 years. The priorities from top management are; People, Planet, and Performance, in that order, helping employees have focus and clear goals.

Link: 2011 CEO statement on success in a down market: http://www.southwestonereport.com/2011/#!/garys-message

Southwest seems serious about this… they fly planes but have always been a distinctive ‘company of people, and they are our greatest asset.’ Gary Kelly the Chairman of the Board, President and CEO exclaimed.

There must have been trade offs for Southwest’s tactics; AirTran was trying to edge in on their model. AirTran was doing a good job at it too expanding into larger cities on the east coast like Washington DC and Atlanta.  So, Southwest figured a way to buy AirTran and enlarge their footprint, mission, reach and family.  This allowed SW to ‘shift outward, lowering costs and improving value at the same time.’

The big lesson is that there is always room to build a strategy including disruption with more satisfied and happy humans.  The results can be long lasting sustainable performance within an established market.  Be ready for  competition to mimic success and head them off with satisfied customers, employees and consistency. 

I still love and use Southwest airlines and share my stories of them often.

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